Rising to speak during a debate on FOFA in the House of Representatives yesterday, Coalition MP for the Queensland seat of Bowman, Andrew Laming, said his position supporting the government’s proposed changes was confirmed after spending a day in the office of Anchor National, an authorised representative of the non-aligned Sentry Group.
“Coming from a different professional background, I wanted to truly understand the issues so I went and spent the day with a financial planner. [Anchor National principal] Mike Smith in Springwood invited me to spend a day in his office,” Mr Laming said.
“For all of the analysis from [Labor] about how the profession should bear the brunt of this compliance cost, it would be good for a Labor MP to actually sit down in the office of a financial planner,” he added, directing his comments at shadow financial services minister Bernie Ripoll, who rose to oppose the government’s changes.
The MP said that he witnessed the advice practice sending out letters to lower-income clients informing them that “due to Labor’s reforms they could no longer provide any advice whatsoever and needed to terminate the adviser-client relationship”.
“Under the new [FOFA] rules, there was simply no cost-effective way of continuing to provide the advice to some low-income clients,” Mr Laming told the parliament. “That outcome cannot be tolerated because low-income people need access to advice.”
Mr Laming added that the government’s changes have broad appeal from “smaller financial planners that aren’t linked to Labor-backed industry funds” and that the savings made from removing elements of the FOFA legislation would be passed on to clients.
More broadly, he argued that “financial planners have become the enemy under Labor” and accused the opposition of “sullying” the entire profession by maintaining its focus on cases such as Storm Financial.
His comments followed a 30-minute address by Mr Ripoll in which the government was accused of “fearing the financial services sector” and putting “sectional interests” ahead of the national interest.
Actually Ben, it seems they’re not interested because there’s no ongoing revenue. But it is (a small part of) what the market wants and should have available. Agreed Michelle, that personal advice is also important, but if you give them tools they can work things out. Remember, they’re often smarter than us! When they connect general advice to their needs they’ll often want an SOA and full recommendation because they see the benefit in paying X to save Y (where x
Philip, I am sure lots of advisers would be interested in running a similar model. But I can’t see how general advice is appropriate in circumstances where an adviser knows key information about clients, changes fees for ongoing reviews and recommends a ‘good public offer’ fund. This is very different to a journalist writing newspaper articles.
Yes there are lots of subscriptions for clients like Huntleys or Switzer. Lots of books you can read too. Wow you could get a degree in our area if you want. I am guessing its hard to really know how much insurance a client needs unless we look at their personal circumstances. What if we described to someone an account based pension and how it works and it knocked their partner off Centrelink cause we didn’t know all the personal circumstances? I’m against General advice being the sole source of recommendation as most people will not piece it all together to act on personally. Sure I don’t like putting together full SoA’s but mine are over the top personalised so it makes sense for clients – not some template. I am not afraid – I am just following what ASIC requires and not all of it compliance wise is helping people but the rules are trying to stop the sharks from scamming people. Maybe it has gone too far – that’s what this is all about – making advice affordable.
Ben – listen up… It’s NOT personal advice. It’s like what Noel Whittaker does. It’s about answering questions with sensible general advice about how products work and how people can use them. This precious attitude displayed by so many is actually denial of reality – that people can afford to pay for advice that’s designed to help them without delving into personal details too deeply and without any product being sold or advised to be bought. If this industry can’t see parallels between itself and (say) medicine or tax questions/answers then it deserves to rot on the vine. Personally, I just get on with helping people and they really appreciate it and happily pay my modest fees. What on earth are you lot afraid of???
Philip, do you provide your clients with a Statement of Advice when you give them ‘tips on insurance, estate planning etc’ and review their superannuation? Even though you run a low cost model, you still have a responsibility to make sure personal financial advice is delivered in an appropriate format. Perhaps ASIC are the ones who should spend a day in your office?
Well done – more lollies should do it
Mr Laming should spend a day in my office and see that the government’s changes are NOT required nor wanted by those in this industry who’re already independent, fee-for-service and looking after our clients’ interest at reasonable cost. Those who refuse to service clients without trailing commissions are admitting that the commissions were far more than they’d be able get if they had to disclose them as fees. We can provide a weekly newsletter (with good general advice about markets and risks suitable for all clients) for $200pa and for an extra $680pa we provide that newsletter AND two annual review meetings with broad general advice and mentoring on DIY super (not SMSF, but a good public offer fund that they can run without an adviser), and some tips on insurance, estate planning etc, allowing them to save many more hundreds of dollars, then so can others.
Up to one third of my clients are at such low-cost and it’s an investment in my business and a pay-back to the community.
If Shorten, Ripoll, Bowen & Dastyari spent 1 hour collectively with a financial planning practice would that make Andrew Laming 8 times more experienced than all of them? So if Shorten, Ripoll, Bowen & Dastyari have spent 0 hours, then anything divided by zero is infinity which therefore makes Laming INFINITLY more experienced to comment….just saying! )
Quoting #9 BS Bob
“We really don’t need barefaced political sledging from an opportunist on either side of the lower house.”
What do you think happened and is still happening under Labor (Shorten, Ripoll, Bowen, Dastyari)Pot/Kettle/Black
I hear the current government trying to create solutions and a level playing field as opposed to the previous vitriol and skewing of the playing field to suit certain financial benefactors.
ANDREW LAMING FOR PM!!!
utter BS Bob, you’ve obviously been reading too many books of diaries from Keating sycophants. If it was up to him, smsfs would not exist and industry funds would control the entire super industry.
Oh dear Mr Laming….”Financial Planners are [becoming] the enemy under Labor” apparently.
Clearly, Mr Laming’s whopping eight hour exposure to the industry, undoubtably qualifies him to comment.
What the industry needs is a bipartisan approach, with a view to balance consumer protection laws with institutional & ‘adviser’ misconduct. We really don’t need barefaced political sledging from an opportunist on either side of the lower house.
That helps no one.
What Mr Laming also forgets is that it was the Labor party in the mid ’80s that did the reform hard yards, so that average workers could save for their retirement through the super system.
Paul Keating was known (back in the day) as the patron saint of Financial Planners when Mr Laming was just a 20 year old undergraduate.
Talk about revisionism.
Andrew Laming the industry crongratulates you for making yourself more informed about a day in the life of a planning practice. Then also sharing it to others. Well done 🙂
Great to see the Coalition are waking up to the disgraceful way we have been treated by Labor. Time for the wider media to also wake up and see what is going on here. The Labor party is totally conflicted on this with their ties to Industry Funds.
I am almost speechless! I am sure that the finance industry is not the only industry which has struggled to deal with legislated obligations brought into play by people who have very little understanding of the industry which they are seeking to regulate. Mr Laming is to be congratulated for personally taking the time to equip himself to provide an informed contribution.
What about a firm requesting Chris Bowen to spend a day in the office of a quality financial planner?…..it will never, ever happen and he would never accept because it would completely decimate his continued rhetorical, scaremongering approach to financial services and render his repetitive analogy to Storm Financial being a likely consequence of revised FOFA legislation as being null and void.
Does Chris Bowen have a Financial Planner? Has any interviewer ever asked him that question? If so,it would be interesting to know Chris Bowen’s opinion on his satisfaction and perception of value and trust the relationship has.
I could guarantee that Ripoll, Shorten and Bowen have never even spoken to a financial planner, let alone spending a day in an office to see exactly what we do. That of course will never happen as David Whiteley would accuse them of consorting with the enemy and selling out their union mates.
Common sense in a politician Am I reading this right or is too early in the morning !!?
Congrats to Andrew Laming for taking a practical approach to his due diligence
Great to see another one of our members actively engaging the nations elected representatives at the grassroots of financial advice. Well done Mike. If more politicians spent time with advisers we would get better parliamentary outcomes. Keep up the great work.
Glad to see someone take the time to look at the practical side of FOFA. I am working on a low net worth client at the moment that needs help. I have put in the plan no ongoing service as I can’t afford to offer it to him as he cannot afford to pay for it. His living expenses are basic and he cannot meet those let alone paying for my services.